Shell’s chief executive Ben van Beurden received a bumper 126 per cent pay increase for 2018, taking his total remuneration to €20.14m.
The increase, from €8.9m, is largely due to a significant payout under the oil major’s long-term incentive plan (LTIP). Mr van Beurden received €15.2m under the LTIP for 2018 compared to €4m a year earlier.
The sizeable increase will no doubt draw criticism from campaigners against high boardroom pay. Mr van Beurden’s pay is 143 times that of the average Shell employee’s salary.
Shell acknowledges in its annual report that its remuneration committee is “sensitive to the wider societal discussions regarding the level of executive pay and spent a significant amount of time discussing the high single figure for the CEO in 2018”.
However, the committee’s chairman, Gerard Kleisterlee, said it took into account the company’s performance over the past three years, which has included completing the acquisition and integration of BG, a $30bn divestment programme and the creation of Shell’s “new energies” business taking the oil major further into renewables as well as investing in electric vehicle charging and domestic electricity and gas supply.
“The CEO’s leadership has been critical in building and delivering on a strategy that is enabling Shell to make such progress in becoming a world-class investment case,” Mr Kleisterlee added.
A spokesperson for Shell said: “Ben van Beurden’s remuneration is the result of three years’ exceptional performance. Shell is the world’s largest dividend payer so many millions benefit from his strong leadership. He has also led the industry in taking action on climate change.”
Shell posted a 36 per cent increase in profits for 2018 to $21.4bn, the highest level since 2014 as it benefited from higher oil prices, a focus on wider-margin projects as well as cost reductions and disciplined spending.
Shell announced earlier this week that it intends to become the world’s biggest electricity group as part of its strategy to prepare for the global transition towards low carbon energy supplies.
How the company continues to adapt to this energy transition, including reducing greenhouse gas emissions from its operations, will become one of the criteria that is taken into account under the group’s long-term incentive plan from this year.